United Kingdom Employment Appeal Tribunal

Appeal No. UKEAT/0326/15/DM

 

 

EMPLOYMENT APPEAL TRIBUNAL

FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8AE

 

 

                                                                                                             At the Tribunal

                                                                                                             On 22 March 2016

 

 

 

Before

THE HONOURABLE MRS JUSTICE SIMLER DBE (PRESIDENT)

(SITTING ALONE)

 

 

 

 

 

 

BRITISH GAS TRADING LIMITED                                                                    APPELLANT

 

 

 

 

 

MISS K PRICE                                                                                                     RESPONDENT

 

 

Transcript of Proceedings

 

JUDGMENT

 

 

 

 

 

 

 

 

 

 

APPEARANCES

 

 

 

 

 

For the Appellant	MR THOMAS CORDREY (of Counsel) Instructed by: Messrs Pinsent Masons LLP 1 Park Row Leeds LS1 5AB
For the Respondent	MR PATRICK HALLIDAY (of Counsel) Bar Pro Bono Scheme

 

 

SUMMARY

UNFAIR DISMISSAL - Contributory fault

 

Having found that the Claimant was guilty of conduct that was “plainly culpable” and amounted to misconduct, which was the reason for her dismissal, the Employment Tribunal erred in holding that her actions did not to any extent cause or contribute to her dismissal.  Its conclusion that what led to her dismissal were the unfair and unreasonable failings by the Respondent to consider and take account of the mitigating circumstances in her case (when it unfairly dismissed her) wrongly focussed on the Respondent’s conduct rather than hers and confused causation of the dismissal with causation of the unfairness.

 

That conclusion infected the Employment Tribunal’s approach to reduction of the basic award too.  The Employment Appeal Tribunal did not have confidence that the Employment Tribunal applied its mind properly to the statutory question whether the Claimant’s culpable misconduct before the dismissal was such that it would be just and equitable to reduce the basic award.  Although no causation test applies, this discretion is focused on the conduct of the employee before the dismissal.

 

THE HONOURABLE MRS JUSTICE SIMLER DBE (PRESIDENT)

 

Introduction

1.                  This appeal involves a challenge to the Decision of Employment Judge Davies, with Reasons sent to the parties on 7 July 2015, that the Claimant neither caused nor contributed to her dismissal by culpable or blameworthy conduct and that it was not just or equitable to reduce the basic or compensatory award payable upon her unfair dismissal.  I refer to the parties as they were before the Tribunal.  Mr Cordrey of counsel represents the Respondent, British Gas Trading Ltd, which appeals the Decision.  The appeal is resisted by the Claimant, who appears by Mr Halliday of counsel.  Neither counsel appeared below.  Both produced helpful skeleton arguments and have made helpful, cogent submissions on this appeal, for which I am grateful.

 

The Facts

2.                  The facts can be shortly summarised by reference to the Employment Tribunal’s findings.  The Claimant commenced employment with the Respondent in April 2002 as a Customer Service Adviser.  She had worked in that role for 12 years prior to her dismissal and had, the Tribunal found, an unblemished disciplinary record.  In November 2013 she began a relationship with a colleague, Mr Aziz, who worked in the same call centre.  Although there were differing accounts of what actually happened on 2 October 2014, the Tribunal found at paragraph 6.3 that whilst on a break at work the Claimant received a call from the ex-girlfriend of Mr Aziz informing her that he had been cheating on her and continuing the relationship with the ex-girlfriend.  The Claimant confronted Mr Aziz at work, raising her voice, and telling him to get outside or come outside, accusing him of cheating on her and of “shagging”.  She tried to grab him by the shirt and in doing so accidentally caught his chin with her hand.

 

3.                  There was a disciplinary investigation and a disciplinary hearing took place on 21 October 2014.  The outcome was that the Claimant was dismissed.  A decision letter confirming her summary dismissal explained the reason as the “clear evidence that she made physical contact and verbally abused a colleague”.  That was considered to be abusive and irresponsible and undermined the trust the Respondent placed in her (see paragraph 3.19).  The Claimant appealed against that decision, pointing out that there was not “clear evidence” that she made physical contact and verbally abused a colleague.  She also pointed out that her behaviour was totally out of character and drew attention to all the surrounding mitigating features.  She said that in consideration of those factors a final written warning would have been appropriate (see paragraph 3.31).

 

4.                  The appeal hearing took place on 6 November 2014.  The Claimant said that she was sorry for the behaviour, and she explained that she should not have gone into the call centre and that she was upset and not thinking at the time (see paragraph 3.33).  By letter dated 10 November 2014 her appeal was dismissed.  The appeal officer said that while there were differences in the witness statements, she was satisfied that the Claimant did make the decision to visit a different floor and that an altercation took place that involved verbal and physical actions.  The Tribunal found at paragraph 3.35 that the appeal officer said that the Claimant had tried to continue the altercation even after the assault and was not confident that the Claimant would not act in a similar way in the future, especially in light of certain comments she made at the disciplinary hearing.  At paragraph 3.38 the Tribunal recorded the fact that the appeal officer was asked why a final written warning was not appropriate and found that she said she took the Claimant’s mitigation into account but that the gross misconduct committed by the Claimant outweighed any mitigation and that her conduct was just not acceptable in the workplace.

5.                  The Tribunal found that the Human Resources Department had recommended that the proper response to the Claimant’s misconduct could be either a final written warning or dismissal (see paragraph 3.27), and the Tribunal found that in opting to dismiss the Claimant the critical question from the point of view of the decision makers was whether there was likely to be any repeat conduct by the Claimant.  The Tribunal found that the decision makers decided that there was.

 

6.                  The Tribunal accepted that the various officers dealing with this disciplinary case each had a genuine belief that the Claimant was guilty of gross misconduct (see paragraph 5.1): the disciplinary panel considered that the Claimant had gone out of her way to have a violent altercation with a colleague in the open plan office entailing verbal abuse of him and that was the reason why she was dismissed; the appeal officer likewise concluded that she was guilty of gross misconduct.  Accordingly, the Tribunal found that the reason for dismissal was the potentially fair reason of conduct.  However, the investigation was unfair and unreasonable and there were no reasonable grounds for belief in the gross misconduct alleged.  The Tribunal also found that the approach to sanction was fundamentally flawed because the Claimant had compelling mitigation that was not taken into account at either the dismissal or appeal stages, and accordingly this was an unusual case in which dismissal was outside the range of reasonable responses.

 

7.                  In dealing with contributory conduct and Polkey v A E Dayton Services Ltd [1987] IRLR 503 the Tribunal made findings as to what the Claimant actually did as follows:

“6.3. Accordingly, I find that, against the background to which I have referred, on receiving the call from Mr Aziz’s ex-girlfriend, the Claimant went down to the Call Centre.  She was talking loudly but not shouting.  She approached Mr Aziz and through gritted teeth she told him to “get outside” or “come outside”.  She accused him of cheating on her and used the word “shagging”.  She went to grab his shirt, to try and pull him out to talk to her.  He smirked and rolled his chair away.  She went to grab him again, and this time caught his chin with her hand.  Mr Pearson then intervened and the two were taken to separate rooms.  The Claimant pleaded to be asked to speak to Mr Aziz.  Mr Aziz tried several times to contact her but could not.  I do not find that the Claimant was shouting, that she used any more inappropriate language than the word “shagging” or that she intended to hit Mr Aziz.  She did try to grab him by the shirt to make him come out with her.  I do accept her evidence that she knew from Mr Aziz’s reaction that what she had just been told was in fact true.”

 

8.                  Furthermore, the Tribunal accepted that the Claimant was upset and remorseful at the disciplinary hearing and that she had apologised and given reassurances that there would be no repetition of the behaviour.  The Tribunal recorded the fact that the Claimant did not dispute at the time that she should not have acted as she did and that her conduct amounted to misconduct (see paragraph 7.3).  It continued:

“7.3. … She went into the Call Centre, tried to grab hold of Mr Aziz and loudly accused him of cheating on her.  In doing so, she ended up catching his chin.  Arguably, this fell within the definition of gross misconduct, on the basis that it was verbally abusive and/or irresponsible towards another employee.  In my view what took place in fact was therefore somewhat less serious than the misconduct found by the disciplinary panel. …”

 

9.                  The Tribunal accepted that the findings at paragraph 6.3 amounted to what it described as plainly culpable conduct on the Claimant’s part.  At paragraph 7.6 it found that it was that conduct that led to disciplinary proceedings against the Claimant.  However, despite that finding the Tribunal went on to say:

“7.6. … However, in my view, it was not that conduct that led or contributed to her dismissal.  What led to her dismissal was the Respondent’s fundamental failure properly to consider and take account of the mitigating circumstances.  If that had been properly done, the Claimant would not have been dismissed.  Her culpable conduct did not contribute, because on their own evidence if the decision makers had found that there was no risk of repetition, that same conduct would have led to a final written warning.  I therefore do not find that the Claimant contributed to her dismissal to any extent and I do not consider that it is just and equitable to reduce either her basic or her contributory award.”

 

The Appeal

10.              The statutory provisions relevant to this appeal are as follows.  Section 122(2) of the Employment Rights Act 1996 (“ERA”) deals with reductions to the basic award and provides:

“(2) Where the tribunal considers that any conduct of the complainant before the dismissal (or, where the dismissal was with notice, before the notice was given) was such that it would be just and equitable to reduce or further reduce the amount of the basic award to any extent, the tribunal shall reduce or further reduce that amount accordingly.”

 

11.              Section 123(6) ERA makes corresponding provision for reducing the compensatory award:

“(6) Where the tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant, it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding.”

 

12.              Although slightly different, both provisions plainly focus on the conduct of the employee and not on the conduct of the employer.  In Optikinetics Ltd v Whooley [1999] ICR 984, the Employment Appeal Tribunal, presided over by HHJ Peter Clark, derived a series of propositions from the many authorities giving guidance as to the proper approach to questions of contribution and reduction of the basic and compensatory awards under these statutory provisions, as follows (page 989):

“(1) Before making any finding of contribution the employee must be found guilty of culpable or blameworthy conduct.  The inquiry is directed solely to his conduct and not that of the employer or others.

(2) For the purposes of section 123(6) the employee’s conduct must be known to the employer at the time of the dismissal (cf. the just and equitable provision under section 123(1)) and have been a cause of the dismissal.

(3) Once blameworthy conduct causing, in whole or in part, the dismissal has been found, the tribunal must reduce the compensatory award by such proportion as it considers just and equitable.  It must make a reduction: see Parker Foundry Ltd v Slack [1992] ICR 302, 309, per Woolf LJ, approving the approach of the appeal tribunal in Warrilow v Robert Walker Ltd [1984] IRLR 304, 306, para 19.

(4) A finding of contribution under section 122(2) does not require a finding that the conduct is causatively linked to the dismissal.  It may be first discovered after dismissal: cf. W Devis & Sons Ltd v Atkins [1977] ICR 662.  The wording of section 122(2) grants to the employment tribunal a wide discretion as to whether the make any, and if so what, reduction in the basic award on the grounds of the employer’s conduct.

(5) After some uncertainty, see Chaplin v H J Rawlinson Ltd [1991] ICR 553, it is now clear that different proportionate reductions are permissible in relation to the basic and compensatory awards: see Rao [v Civil Aviation Authority] [1994] ICR 495; Slack [1992] ICR 302 and [Charles Robertson (Developments) Ltd v] White [1995] ICR 349.

(6) The appellate courts will rarely interfere with the employment tribunal’s assessment of the percentage reduction for contribution: Hollier v Plysu Ltd [1983] IRLR 260.”

 

13.              Both counsel accept the correctness of those principles save for a small qualification by Mr Halliday, who cavils at the conclusion identified at (3) that the Tribunal must make a reduction once blameworthy conduct causing, in whole or in part, the dismissal has been found.  In his submission, Parker Foundry Ltd v Slack [1992] ICR 302 is not authority for that.  Although not the subject of full argument because the point was not directly relevant, I am not sure he is correct.  It seems to me that the proper approach here is that having found that conduct did cause or contribute to the dismissal, a Tribunal is required to consider reducing the amount of the compensatory award and to do so by such proportion as it considers just and equitable having regard to “that finding”.  In other words, in exercising this discretion the Tribunal must have regard to the finding that the actions of the employee contributed to the dismissal.  While the words “just and equitable” in section 123(6) give the Tribunal a discretion, that discretion is expressly limited to considering what is just and equitable having regard to the extent to which the contributory conduct found contributed to the dismissal.  Given that, it is difficult to envisage circumstances, although I do not altogether rule them out, that would justify a conclusion that it would not be just and equitable to reduce the award at all when there has been a finding that the Claimant’s blameworthy conduct caused or contributed to the dismissal.

 

14.              The Tribunal gave itself a direction of law in relation to sections 122(2) and 123(6) that is not challenged by Mr Cordrey as in error of law.  Rather, he challenges the Tribunal’s conclusion that the Claimant’s actions in this case did not cause or contribute to her dismissal because:

“7.6. … What led to her dismissal was the Respondent’s fundamental failure properly to consider and take account of the mitigating circumstances. …”

 

15.              He contends that the Tribunal confused causation of the dismissal with causation of the unfairness of that dismissal and thereby made an error of law.  Mr Cordrey relies on Gibson v British Transport Docks Board [1982] IRLR 228 EAT (Browne-Wilkinson J) at paragraphs 27 to 29 where the Employment Tribunal assessed the extent of contribution to the unfair dismissal at 100 per cent.  On appeal the argument was that the conduct of the employees did not cause or contribute to the dismissal; rather, the dismissal was caused or contributed to by the failure of the employers to follow the necessary and proper procedures.  That approach was rejected, the EAT holding that:

“29. … What has to be shown is that the conduct of the applicant contributed to the dismissal.  If the applicant has been guilty of improper conduct which gave rise to a situation in which he was dismissed and that conduct was blameworthy, then it is open to the Tribunal to find that the conduct contributed to the dismissal.  That is how the section has been uniformly applied.”

 

16.              He submits that the same incorrect approach has been adopted by the Tribunal in this case.  Here, the Tribunal found that the reason for dismissal was the Claimant’s conduct.  That was a causation finding and was the situation that led to her dismissal.  However, that finding was not applied when the Tribunal came to apply the facts to the straightforward statutory test at paragraph 7.6.  Although the Tribunal described the Claimant’s conduct as plainly culpable, it wrongly focussed on the fairness and reasonableness of the Respondent’s conduct and concluded that it was that to the exclusion of anything else that caused the dismissal.  That, he submits, was the very approach accepted as in error in Gibson.  Moreover, that approach deprives section 123(6) of its purpose in many, if not all, unfair dismissal cases.

 

17.              So far as the basic award is concerned, Mr Cordrey submits that if the Tribunal erred in relation to its approach to the compensatory award, that infects its decision in respect of the basic award because conduct is expressly relevant, albeit not expressed as a causation test.  There can, he submits, be no confidence that the Tribunal applied its mind properly to the question of the extent to which the Claimant’s conduct was such as means it would be just and equitable to reduce the basic award to some extent.

 

18.              Against those submissions Mr Halliday makes a number of submissions on behalf of the Claimant, which I shall deal with in turn.  First, he submits that the Tribunal’s self-direction in law was immaculate.  Having identified the contributory fault issue, the relevant legal test was accurately set out, and the paragraph in which the Tribunal applied the law to the facts contains no suggestion of any departure from that test.  It follows that the appeal may be pursued here only on grounds of perversity, which is a high hurdle.  I accept, and indeed Mr Cordrey does not seek to challenge this, that the Tribunal’s self-direction in law was correct and that this Appeal Tribunal should be slow to conclude that when applying the law to the facts that self-direction was ignored.  Nevertheless, paragraph 7.6 is clear.  The Tribunal found culpable conduct on the Claimant’s part but concluded that the conduct, whilst leading to disciplinary proceedings against her, did not lead to or contribute to her dismissal to any extent because what led to her dismissal was the unfairness of the Respondent’s approach.  If that discloses an error of law, then that decision cannot stand.

 

19.              The question for the Tribunal was the statutory question: did the culpable conduct cause or contribute to any extent to the Claimant’s dismissal?  That question involves a mixed question of law and fact, as the parties agree.  In many cases, the answer will be obvious once the facts are found taking a broad, commonsense approach.  There may be cases however, where an evaluative judgment must be made as to whether the conduct was a legal contributing or an effective cause; or to put it another way, whether dismissal was a direct and natural consequence of the conduct.  Depending on the circumstances, it is open to a Tribunal to determine that it was not.

 

20.              Mr Halliday submits that this is what the Tribunal did and that paragraph 7.6 reflects a finding that, although but for the Claimant’s conduct she would not have been dismissed, this was not in law a cause because the Respondent’s fundamental failings broke the chain of causation and, moreover, she was dismissed for something different from what she had in fact done.  I do not accept those submissions.  First, the Tribunal did not make any findings about the chain of causation being broken, and nor can its reasoning be safely read in this way.  The Claimant was not dismissed for something radically or altogether different from the original misconduct alleged.  Moreover, however significant the failings were, the Tribunal did not find that they effectively extinguished the culpable conduct of the Claimant.  Even if the Respondent’s conduct significantly contributed to the dismissal in this case, it is impossible on the Tribunal’s findings to conclude that the Claimant’s culpable conduct played no part and made no contribution at all.  As the Tribunal found, the Claimant did not dispute that she should not have acted as she did and that her conduct amounted to misconduct.  At best, there were two causes, each of which contributed to this dismissal to different extents.

 

21.              In my judgment, the Tribunal did fall into error, as Mr Cordrey submits, in confusing causation of the dismissal with causation of the unfairness of that dismissal.  On a proper application of the statutory test to the findings the Tribunal made, including in particular the finding that the Claimant’s culpable conduct was misconduct and was the reason for her dismissal, the Claimant’s actions caused or contributed to her dismissal to some extent.  If the Tribunal’s reasoning is correct in every case where a Tribunal is considering contributory conduct because of substantive unfairness having been found, if the Respondent had acted within the band of reasonable responses dismissal would not have occurred.  However, it is, as Mr Cordrey submits, a non-sequitur to conclude that such a Claimant’s conduct cannot have contributed to the dismissal to any extent because of that.

 

22.              So far as the basic award is concerned, Mr Halliday relies on an independent and freestanding finding at paragraph 7.6 that it was not just and equitable to reduce the basic award.  He emphasises in the context of the basic award the wide discretion available to the Tribunal to refuse a reduction simply on the basis that it would not be just and equitable to make one.  That was the basis on which the Tribunal refused to make a reduction, and he argues that there is no basis for saying that the Tribunal exercised this wide discretion perversely.  I accept that there is no causation test in section 122(2) but, as already indicated, it does require a focus on the conduct of the employee before the dismissal and the extent to which that conduct makes it just and equitable to reduce the basic award.  Although initially attracted to Mr Halliday’s submission, in the light of the Tribunal’s error in relation to the compensatory award at paragraph 7.6 and its failure to reflect the conduct of the Claimant in exercise of its discretion, I am not confident that this Tribunal applied its mind properly to the question of the extent to which the conduct of the Claimant made it just and equitable to reduce the basic award.  The Tribunal’s Reasons are not as full as they might have been, but there is no Reasons challenge and I reach my conclusion not on this basis but on the basis that the wrong approach taken to section 123(6) and the conduct of the Claimant, infects its approach to section 122(2).

 

Conclusion

23.              For those reasons, on the findings of fact made by the Tribunal that the Claimant’s conduct was culpable and amounted to misconduct that gave rise to the situation leading to her dismissal, it seems to me that the only conclusion open to the Tribunal was that the Claimant’s actions caused or contributed to her dismissal to some extent.  Moreover, that conduct was also the relevant consideration to exercising the just and equitable discretion under section 122(2) and was not addressed.  Accordingly, the Tribunal’s conclusions at paragraph 7.6 cannot stand in relation to both the compensatory or basic awards.

Disposal

24.              Having reached the conclusion that the appeal must be allowed I do not consider that there is only one conclusion open in relation to the determination of the extent to which the Claimant’s actions caused or contributed to her dismissal or the extent to which her conduct makes it just and equitable to reduce the basic award.  The Claimant does not agree that the Appeal Tribunal should exercise those discretions itself and Mr Halliday points to the fact that the Remedy Hearing in this case remains outstanding and submits the Employment Judge who dealt with the case will be best placed in those circumstances to undertake this exercise.  Whilst accepting that it would be disproportionate to remit the case to a different Tribunal in those circumstances, bearing in mind the Remedy Hearing and the relatively modest sums at stake, Mr Cordrey submits (not altogether unjustifiably) that the way in which the Tribunal expressed itself in relation to questions of contribution suggests that it may be difficult to change the Tribunal’s mind and that there will be, as described in Sinclair Roche & Temperley v Heard and Anor [2004] IRLR 763, a very human desire to attempt to reach the same result.  In order to maintain confidence that the Tribunal will look at the matter fully and with an open mind, he invites further guidance in relation to the reduction to be made if the matter is to be sent back to Employment Judge Davies.

 

25.              I am quite sure that the appropriate course to adopt, for the reasons identified by Mr Halliday and broadly accepted by Mr Cordrey, is to remit this case to Employment Judge Davies who is fully familiar with it.  No further guidance is necessary or appropriate.  With the guidance already given in this Judgment, the Employment Judge is no doubt capable of approaching the matter with an open mind, bearing in mind the finding that the Claimant’s conduct was culpable and amounted to misconduct, and in light of the findings, the only conclusion open to the Tribunal was that the Claimant’s actions caused or contributed to her dismissal.  The extent to which they did so and the extent to which her culpable conduct supports a conclusion that it is just and equitable to reduce the compensatory and basic awards will be a matter for the Tribunal, taking a broad, commonsense view, and in light of the findings it has already made.  I am quite sure that Employment Judge Davies will approach those questions properly and professionally.  For those reasons, the case is remitted to Employment Judge Davies and can conveniently be dealt with at the same time as other matters relating to remedy.